Revenue cycle glossary
The vocabulary of healthcare billing, defined the way it is actually used — with the operational detail that decides whether a term is useful or just a definition. Every entry explains what it is, why it matters, and what it costs you when it goes wrong.
EDI & files
CARC (Claim Adjustment Reason Code)
The standardised code in an 835 that explains why a payer adjusted or denied part of a claim.
Clearinghouse
An intermediary that validates, formats, and routes claims to payers and returns acknowledgements and remittances.
EDI 835
The standard electronic file a payer sends after adjudicating claims, itemising what was paid, what was adjusted, and why.
EDI 837
The standard electronic file used to submit claims to a payer — the outbound counterpart to the 835.
EOB (Explanation of Benefits)
A human-readable statement of how a claim was adjudicated — the paper counterpart to an ERA/835.
ERA (Electronic Remittance Advice)
The electronic form of a remittance advice — in United States healthcare, an ERA is delivered as an EDI 835 file.
RARC (Remittance Advice Remark Code)
A supplementary code that adds the specific detail a CARC alone does not carry.
Claims process
Claim appeal
A formal request that a payer reverse a denial, supported by documentation and filed within the payer’s appeal window.
Claim scrubbing
Automated pre-submission checks that catch coding and data errors before a payer sees the claim.
Coordination of benefits
The rules that decide which of a patient’s plans pays first when they have more than one.
Eligibility verification
Confirming a patient’s active coverage and benefit details with the payer before the service is rendered.
Prior authorization
A payer’s advance approval requirement for certain services, without which the claim is denied after the service is delivered.
Timely filing
The payer’s deadline for receiving a claim, after which it will not be adjudicated at all.
Payments
Contractual adjustment
The difference between your billed charge and the payer’s contracted allowed amount, which a participating provider must write off.
EFT and trace number
The electronic deposit a payer sends and the reference number that links it to the matching remittance file.
Payment posting
Applying payer payments and adjustments to the correct claims and moving the remaining balance to the right responsible party.
Remittance advice
The document or file in which a payer explains a payment: which claims it covers, what was allowed, and what was adjusted.
Underpayment (payment variance)
A claim the payer paid, but paid below the contracted allowed amount — a denial that never announces itself.
Metrics
AR aging
Outstanding receivables grouped by how long they have been unpaid, usually in 30-day buckets.
Clean claim rate
The share of claims that adjudicate successfully on first submission with no edits, rejections, or rework.
Days in AR
The average number of days it takes to collect a dollar after the service is billed — the headline speed metric of a revenue cycle.
Denial rate
The share of claims — better, of claim dollars — that a payer denies rather than paying.
First-pass resolution rate
The share of claims fully resolved on the first submission, with no rework, appeal, or resubmission.
Gross collection rate
Payments as a percentage of gross charges — mostly a reflection of your fee schedule, not your collections performance.
Net collection rate
The share of collectable revenue you actually collected, after contractual adjustments are removed from the denominator.
Revenue cycle management (RCM)
The end-to-end process of turning care delivered into cash collected — from registration through payment posting and follow-up.
Know the terms. Now see your numbers.
Days in AR, net collection rate, denial rate by payer — PayerVista calculates them from the 835 remittance files your payers already send, instead of leaving you to assemble them in a spreadsheet each month.